List of ESG Factors

List of ESG Factors

This is a list of ESG Factors as currently considered to capture most material Environmental Social and Corporate Governance criteria, .

The list is structured in ESG groups / sub-groups / individual factors. For each factor there is an indication as to how it can be assessed / measured and remarks about definitions or other challenges. The list can be used as a checklist in an analytic framework and/or as a pool of possible variables in a scoring / rating approach.

Environmental Factors

Factor	Measurement	Remarks
Emissions
Greenhouse Gas Emissions, Total GHG emissions (broken down by scope 1, 2 and 3 carbon emissions)	Tonnes of CO2e	Greenhouse gas (GHG) emissions as defined in the GHG Protocol methodology (Tools) or the ISO 14064-1:2018 standard and, where appropriate, in the European Commission’s Recommendation 2013/179 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations Scope 1, 2 and 3 GHG emissions means the greenhouse gas emissions referred to in point (1)(e)(i-iii) of Annex III of Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 Tonnes of CO2 means tonnes of carbon dioxide equivalent as defined in Article 3(j) of Directive 2003/87/EC of the European Parliament and of the Council of 13 Octobe
Emissions of Air Pollutants	Weight in tonnes of air pollutants	Air pollutants means Direct Sulphur dioxides (SOx/SO2) emissions, Direct Nitrogen oxides (NOx/NO2) emissions, Direct Ammonia (NH3) emissions, Direct Particulate matter (PM2.5) emissions, Direct Non-methane volatile organic compounds (NMVOC) emissions, Direct total heavy metals (HM) emissions as referred to in Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC
Emissions of water pollutants	Weight in tonnes of water pollutants	Water pollutants means Direct Nitrates emissions (scope 1), Direct Phosphate emissions (scope 1), Direct Pesticides emissions (scope 1), Direct emissions of priority substances (scope 1) as defined in the Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy , Council Directive of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources (91/676/EEC), Council Directive 91/271/EEC of 21 May 1991 concerning urban waste-water treatment 235 and Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control)
Emissions of inorganic pollutants	Weight in tonnes of inorganic pollutants	inorganic pollutants means emissions within or lower than the emission levels associated with the best available techniques (BAT-AEL) ranges set out in the Best Available Techniques Reference Document (BREF) for the Large Volume Inorganic Chemicals - Solids and Others industry
Carbon Footprint	Tonnes of CO2	‘carbon footprint’ is an absolute or relative measure of GHG emissions as defined above in GHG emissions
Fossil fuel sectors	% or total	Fossil fuel sectors relates to the production, processing, distribution, storage or combustion of fossil fuels, with the exception of investment related to clean vehicles as defined in Article 4 of Directive 2009/33/EC of the European Parliament and of the Council on the promotion of clean and energy-efficient road transport vehicles
Reduction policies or initiatives on the use and production of fossil fuels	Presence/lack of reduction policies or initiatives in place on the use and production of fossil fuels	Fossil fuel sectors relates to the production, processing, distribution, storage or combustion of fossil fuels, with the exception of investment related to clean vehicles as defined in Article 4 of Directive 2009/33/EC of the European Parliament and of the Council on the promotion of clean and energy-efficient road transport vehicles
Compliance with Paris Agreement targets	yes/no	National emissions reduction commitments for EU countries, these are obligations to reduce emissions of a given substance, specifying the minimum emission reductions that have to be achieved in the target calendar year, as a percentage of the total of emissions released during the base year (2005), as per Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC (OJ L, 17.12.2016, pp. 1-31). For other countries, refer when available to intended Nationally Determined Contributions to reduction in GHG emissions under the United National Framework Convention on Climate Change (UNFCCC)
Reduction policies or initiatives on emissions	Presence/lack of reduction policies or reduction policies or initiatives in place on emissions
Energy Efficiency
Energy Consumption Intensity	In Gigawatt hours (GWh)	‘energy consumption intensity’ measures the energy consumption per unit of activity, output or any other metric, in the meaning of Directive ((EU) 2018/2002) amending the Energy Efficiency Directive (2012/27/EU)
Use of renewable sources of energy	% or total Presence/lack of initiatives to reduce the use of non-renewable energy	Renewable Energy sources means renewable energy sources referred to in Article 2(1) of Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion and use of energy from renewable sources. All other energy sources are non-renewable energy sources.
Water Usage
Water consumption intensity	% or total - weight in tonnes of water consumption	Water consumption intensity in the meaning of Directive 2000/60/EC of 23 October 2000 establishing a framework for Community action in the field of water policy with a view to protecting the sustainable use and environmental status of all waters
Waste Production
Production of hazardous waste	% or total - weight in tonnes of hazardous waste	Hazardous waste means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives, and radioactive waste
Reusability/Recyclability	% or total - weight in tonnes of non- recycled waste production Presence/lack of initiatives to reduce the production of waste	Non-recycled waste means any waste not recycled within the meaning of ‘recycling’ in Article 3(17) of Directive 2008/98/EC;
Biodiversity and Ecosystems
Presence/operations (e.g. own, via value chain) in geographic areas impacted by soil degradation	% or total	Soil Degradation means the diminishing capacity of the soil to provide ecosystem goods and services as desired by stakeholders, according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) as referred to in paragraph 100 of Decision No 1386/2013/EU;
Presence/operations (e.g. own, via value chain) in geographic areas and industries that are particularly dependent on biodiversity and ecosystem services	% or total	Biodiversity and ecosystem services refers to the concept of biodiversity and ecosystem services as laid out in the global assessment report on biodiversity and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), released in May 2019;
Presence/operations (e.g. own, via value chain) in protected areas or areas of high biodiversity value outside protected areas	% or total	Protected Area means an area designated under the European Environment Agency’s Common Database on Designated Areas (CDDA) Area of high biodiversity value outside protected areas means an area not subject to legal protection, but recognised for important biodiversity features by a number of governmental and non-governmental organisations, including habitats that are a priority for conservation, which are often defined in National Biodiversity Strategies and Action Plans prepared under the United Nations (UN) Convention, ‘Convention on Biological Diversity’, 1992
Operations (e.g. own, via value chain) affecting IUCN Red List species and/or national conservation list species	% or total
Environmental Hazards
Presence/operations (e.g. own, via value chain) in areas likely to be affected by heatwaves	% or total	Heatwaves means heat or hot weather that lasts for several days, as defined in the European Environment Agency’s indicator assessment of ‘extreme temperatures and health’.
Presence/operations (e.g. own, via value chain) in areas likely to be affected by water scarcity	% or total	Water Scarcity means pressure on the renewable freshwater sources of a defined territory during a specific period, where the percentage of total water withdrawn is high (40-80%) or extremely high (greater than 80%) in the World Resources Institute’s (WRI) Water Risk Atlas tool ‘Aqueduct’.
Presence/operations (e.g. own, via value chain) in areas likely to be affected by floods	% or total	Floods means overflows of large amounts of water beyond its normal limits, caused by increases in mean local sea levels which can be further increased by storm surges and tidal changes, as defined in the European Environment Agency’s indicator assessment of ‘Extreme sea levels and coastal flooding’.
Presence/operations (e.g. own, via value chain) in areas likely to be affected by coastal erosion	% or total	‘coastal erosion’ is the process by which local sea level rise, strong wave action, and coastal flooding wear down or carry away rocks, soils and/or sands along the coast, as defined in the US government’s Climate Resilience Toolkit
Presence/operations (e.g. own, via value chain) in areas likely to be affected by wildfires	% or total	Wildfire is an unplanned fire that burns in a natural area such as a forest, grassland or prairie and which are often caused by human activity or a natural phenomenon, the risk of which increases in extremely dry conditions such as droughts, as defined in the European Environment Agency’s indicator assessment of ‘Forest fires’.

Social Factors

Factor	Measurement	Remarks
Community and Society
Relations with local communities (networks)	Yes/No	Establishment of business in rural and economically and socially underdeveloped areas
Social impact of products and services	Qualitative	Products’ potential to reach rural areas and groups of society where development gaps exist
Employee Relationships and Labour Standards
Freedom of association and right to organise	Yes/No	Observation and implementation of due diligence policies on issues addressed by ILO fundamental conventions 1 and 2
Forced labour	Yes/No	Observation and implementation of due diligence policies on issues addressed by ILO fundamental conventions 3 and 4
Minimum age and child labour	Yes/No	Observation and implementation of due diligence policies on issues addressed by ILO fundamental conventions 5 and 6
Equal representation	Average ratio of female to male board members Average ratio of females to males in total workforce
Equal remuneration	Observation and implementation of due diligence policies on issues addressed by ILO fundamental convention 7 Average gender pay gap Average ratio of the annual total compensation for the highest individual to the median annual total compensation for all employees (excluding the highest-compensated individual) Ratio of annual total compensation for the highest compensated individual to the median annual total compensation for all employees (excluding the highest compensated individual)
Discrimination	Observation and implementation of due diligence policies on issues addressed by ILO fundamental convention 8 Number of incidents of discrimination (i) reported and (ii) leading to sanctions
Human capital management and employee relations (training and development opportunities)	Share of employees attending training courses in a given year Frequency of performance assessment per employee
Workplace health and safety	Rate of accidents Number of workdays lost to injuries, accidents, fatalities and illness
Customer Relationships
Customer protection and product responsibility	Extent to which products are monitored once introduced on the market Extent to which product recall procedures are in place Number of incidents of product recalls/withdrawals Handling and degree of transparency on management’s actions following product recalls/withdrawals Lack/presence of a supplier code of conduct
Personal data security and privacy	Number/rate of data security incidents in which Personally Identifiable Information (PII) was at risk Explanation/disclosure of policies and practices relating to user privacy Monetary losses (total amount in EUR) incurred as a result of legal proceedings associated with user privacy Degree of transparency on management’s approach to identifying and addressing data security risks
Rights of customers to obtain information about ESG factors	Percentage of significant product/service categories that comply with information and labelling that includes information on sourcing, content (i.e. substances that could have an environmental or social impact), safe use of the product or service, disposal of the product and environmental or social impacts Degree of transparency on the management’s approach to marketing and labelling ESG-related information Publication of information on ESG performance (in the form of stand-alone reports or by integration into Annual Reports)
Quality and innovation in customer relations	Number of customer Complaint incidents
Human Rights
Contribution to human rights projects	Engagement in social projects aimed at supporting and advancing human rights issues in regions of concern Number of cases of severe human rights issues and incidents Presence/lack of processes and measures for preventing trafficking in human beings Presence/lack of human rights due diligence Presence/lack of a human rights policy
Povery and Famine
Contribution to poverty reduction	Engagement in poverty reduction/aid programmes Employment opportunities for economically less advantaged groups

Governance Factors

Factor	Measurement	Remarks
Ethical Considerations
Integrity of conduct/conduct frameworks	Yes/No	Alignment with the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights
Values and ethics	Yes/No	Alignment with the Charter of Fundamental Rights of the EU
Bribery and corruption	Compliance with United Nations Convention against Corruption Identification of insufficient actions taken to address breaches in procedures and standards of anti-corruption and anti-bribery Convictions and violations of anti-corruption and anti-bribery laws (number of cases and amount of fines) Presence/lack of anti-corruption and anti-bribery policies
Accountability/rule of law	Alignment with the Worldwide Governance Indicators (World Bank)
Strategy and Risk Management
Strategy implementation, operational execution and monitoring	Alignment with the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights
Internal controls and risk management policies and procedures	Alignment with the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights
Inclusiveness
Discrimination	Gap between males and females or any other minority groups in the given region in education access and/or outcomes, representation in government positions and/or boards, salary income, etc. Lack of a diversity strategy in place (e.g. age, gender, minority groups) Percentage of employees and individuals in governance bodies as per the various diversity categories defined in GRI standard 405-1.
Transparency
Observance of disclosures, information rules and practices	Reliance on high quality, broadly recognised national, EU-based or international frameworks when preparing non-financial statements, including disclosure of the framework chosen Compliance with Non-Financial Reporting Directive

See Also

• ESG Factors
• ESG Risks
• ESG Risk Transmission Channel